US Trends

what happened to paypal stock

PayPal’s stock has been in a multi‑year slump and just got hit again because of weak profit guidance and leadership turmoil, even though the core business is still generating solid cash flow and buybacks.

TL;DR: What happened to PayPal stock?

  • The share price is down more than 80% from its all‑time highs as of early 2026, after several years of slowing growth and multiple compression.
  • In early February 2026 the stock dropped sharply (around 20% intraday) after a disappointing 2026 profit forecast and news that the CEO Alex Chriss is being replaced.
  • The company still expects strong cash generation and has plans for large share buybacks by 2026, but the market is skeptical about growth and margins.

How PayPal went from market darling to “problem stock”

After peaking in the pandemic boom, PayPal’s growth slowed, competition increased, and investors stopped paying a high valuation multiple for its earnings.

Key structural issues that built up over 2022–2025:

  • Slower revenue growth versus the “hyper‑growth fintech” story investors originally bought into.
  • Rising competition from Apple Pay, Block (Square/Cash App), and other digital wallets, pressuring fees and margins.
  • Market fatigue with “expensive fintech” names, which pushed valuation multiples down across the sector.

By early 2025–2026, PayPal was trading at a far lower price‑to‑earnings multiple than at its peak, which is a big reason the stock is down so far from its highs even though the business is still profitable.

The latest hit: 2026 outlook and CEO change

The most recent leg down is tied to new guidance and a leadership shake‑up.

What just spooked the market:

  1. Weak 2026 profit forecast
    • Management guided to full‑year adjusted profit that could be flat or even slightly down versus the prior year, versus Wall Street expecting roughly mid‑single‑digit to high‑single‑digit growth.
 * That undercut the idea that PayPal was about to re‑accelerate earnings.
  1. CEO exit
    • PayPal announced it was replacing CEO Alex Chriss, who had been brought in to fix growth and competition issues.
 * A CEO change so soon is often read as a sign that the board is unhappy with the trajectory, which adds uncertainty.
  1. Walking back longer‑term promises
    • Management indicated they would no longer stand by the specific 2027 targets they laid out previously and will focus on one‑year‑at‑a‑time guidance.
 * Investors view this as a step back from a clear long‑term roadmap.

The combination of “lower‑than‑expected profits,” “leadership reset,” and “less confidence in long‑term targets” is exactly the cocktail that leads to a big single‑day drop in a stock like this.

Under the hood: business vs. stock

The business is not collapsing, but the market is debating how much it should pay for it. Positives bulls point to:

  • Transaction margin growth has turned positive again (mid‑single digits in 2025) which suggests core operations are stabilizing.
  • High‑growth areas like Buy Now, Pay Later and Venmo monetization are growing quickly and carry better margins.
  • Management and analysts expect strong free cash flow and a plan for up to about 6 billion dollars in share repurchases by fiscal 2026, which can boost earnings per share.

Negatives bears focus on:

  • The new 2026 profit guide contradicts the “earnings re‑acceleration” narrative many were hoping for.
  • Competitive pressure means PayPal may have to keep spending heavily on incentives, tech, and AI/“agentic commerce” to stay relevant, which could cap margins.
  • Sentiment is weak: once a stock has fallen 70–80%, many investors view it as a “value trap” until it delivers multiple clean quarters.

Is there any path to recovery?

Forecasts vary widely, which is why the stock is volatile.

  • Some valuation models see upside if PayPal can sustain modest revenue growth and slightly higher margins, with price targets implying low‑double‑digit annual returns into 2027 from recent levels.
  • Other forecasts for 2026 show a very wide price range and highlight ongoing volatility and uncertainty around growth and competition.

In other words, the story has shifted from “fintech hyper‑growth” to “prove you can grow steadily and protect margins in a crowded market,” and the latest guidance plus CEO exit made that proof harder in the near term.

Information gathered from public forums or data available on the internet and portrayed here.